Mobile Internet Penetration in India Forecast 2016

As the ASP (Average Selling Price) of smartphones is plummeting, smartphone adoption in India is shooting high, thereby giving a fillip to the number of mobile internet users in the country. eMarketer in a report released in December 2015, forecasted that India will exceed 200 million smartphone users, topping the US as the world’s second-largest smartphone market by 2016. Similarly, IAMAI in a freshly released report has estimated that the country will have over 371 million mobile internet users by June 2016. Further, it has also predicted that by the end of June 2016, 65 million more users will come on board.

With the introduction of smartphones and tablets, digital content has come to the fingertips of consumers. Given such easy accessibility coupled with affordability, there has been a dramatic shift from laptop/desktop to mobile devices. Another factor that is driving the use of mobile devices is their flexibility/mobility i.e, users can obtain data on the go without having to be stationed at a fixed location.

Should we compare the growth of mobile internet users in India with that of the total internet penetration, we may ascertain that the former stands on the stronger footing. As per another report by IAMAI published by the Indian Express, the total internet penetration in India will hit a mark of 462 million by the end of June 2016 with an estimated 31% YoY growth during the first half of 2016. Mobile internet penetration on the other hand, is estimated to grow 56% YoY in the same time frame.

The Urban and the Rural Divide

It has been forecasted that 71% of the aforementioned 371 million mobile internet users (262 million) in India will hail from urban areas while rural India is expected to have 109 million users. Nevertheless, one can not ignore the pace at which rural areas are catching up. In 2015, the number of mobile internet users from rural area doubled from 2014, and in 2016 the growth percentage is estimated to surpass all the previous figures.

Owing to the infrastructural development under the digital revolution that the country is going through at present, and with the introduction of high speed 3G and 4G connectivity, more and more people across geographies are falling back on the internet for most of their activities.

In 2015, the share of mobile internet spend in the average monthly bill rose to 64% from 54% which was recorded in the previous year. This is despite the average monthly bill reducing to the extent of 18% in 2015 (Rs 360) compared to the previous year (Rs 439 in 2014).

Consumers in smaller cities and towns are rapidly embracing smartphones and mobile internet to bridge the digital gap. For most of the rural and semi-urban populace, mobile technology represents an easy to carry and economical alternative to other personal technology-driven devices, primarily used for entertainment, followed by 39% for social media and 37% for communication. The consumption of mobile video content in Tier 2 and Tier 3 cities in India, is much higher than those from urban India. According to a latest report by Cisco, mobile video traffic in India will grow at 83% CAGR between 2015 and 2020. Video content will account for nearly 50% of total mobile data consumption in India by 2017.

Way Ahead

Needless to say, mobile internet is gradually emerging as an everyday essential for the Indian population. Adoption of mobile internet is growing in tandem with the smartphone penetration in the country. However, there remain several rural pockets which are yet to be brought under the umbrella of this technological revolution. Further, even in geographies where smartphones have already penetrated, users are unable to avail of the services optimally owing to poverty of awareness, paucity of digital knowledge, monetary dearth and lack of understanding of plans. Once these loopholes are fixed, India can look forward to become the greatest beneficiary of the Digital Revolution that is taking the world by storm.